In Beijing on December 14 and 15, the United States and China held the first Strategic Economic Dialogue, with the theme of "China's Development Road and China's Economic Development Strategy." The dialogue was co-chaired by Treasury Secretary Henry M. Paulson, Jr. and Vice Premier Wu Yi, as representatives of the two countries' Presidents. During one and a half days of productive and in-depth discussions on overarching and long-term strategic economic issues, we reaffirmed our commitment to pursuing macroeconomic policies, such as China's exchange rate regime reform and increasing the U.S. savings rate, to promote balanced and strong growth and prosperity in our two nations.

Based on effective intellectual property rights protection, the rule of law, and the dismantling of trade and investment barriers, we agreed on the importance of establishing open and competitive markets, accelerating development and job creation, stimulating domestic and international trade and investment, and promoting sustainable development through energy security, environmental protection, and access to health care. Both sides committed to take positive steps to strengthen the WTO, including through successful conclusion of the Doha Round, and will intensify bilateral contacts to this end.

Through our discussions, we decided to prioritize work during the next six months in several strategic areas. Both sides agreed to conduct discussions on development of efficient innovative service sectors and on ways to improve health care. We are launching a bilateral investment dialogue with exploratory discussions to consider the possibility of a bilateral investment agreement, enhancing cooperation on transparency issues, and launching a joint economic study on energy and environment.

Furthermore, we committed to invigorate ongoing work within the JCCT on high-tech trade, IPR, and market economy status/structural issues. Utilizing other existing mechanisms, both sides agreed to increase bilateral cooperation on more efficient and environmentally sustainable energy use, facilitation of personal and business travel, development assistance, and MDB lending.

Finally, both sides agreed that NYSE and NASDAQ should open offices in China, that China will participate in the government steering committee of the FutureGen project, and that the United States will support China's membership in the IADB. Both sides concluded an agreement facilitating financing to support U.S. exports to China and agreed to re-launch bilateral air services negotiations.

The next SED will be held in Washington, D.C. in May 2007.

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